Maruti Suzuki India, New Delhi, Delhi

Corporate Profile

Maruti Suzuki India Limited (MSIL, formerly known as Maruti Udyog Limited) is a subsidiary of Suzuki Motor Corporation, Japan. MSIL has been producing cars in India since 1983. Maruti’s revenues totaled approximately 73.3 billion rupees in 2009-2010. It’s operating profit as of 2009-2010 is 75 billion rupees while its net profit comes to 6.8 billion rupees.

The company has two manufacturing facilities located at Gurgaon and Manesar, south of New Delhi, India, which have an annual combined capability to produce over a 12 lakh (12, 00,000) passenger car units. The company is planning to invest 17 billion rupees in the Manesar plant.

Maruti is known for its hatchback cars, especially the Maruti 800. Other popular hatchback models include the Maruti Zen and the Alto.

In 2009-10, the company sold a record 10,18,365 units including 1,47,575 units which we exported primarily to Europe, the remaining 870,790 sold in India. In the third quarter of 2009-2010, the company sold 258, 026 units. Thus, in March 2010, Maruti Suzuki had a India market share of 53.3 per cent of the Indian passenger car market of 16,33,752 passenger car units.

Maruti Suzuki will be investing around Rs.1,250 crore (Rs 12.5 billion) on capacity expansion of the K-series engines between 2010 and 2012. The expanded annual capacity will be over 7 lakh units from the present 5 lakh units of K-series engine cars. This will be a progressive investment to be completed by 2012. It has a sales network is 802 centers in 555 towns and cities across India. The customer service support network comprises of 2,740 workshops in over 1,335 towns and cities.

In 2008, Maruti Suzuki India Limited, unveiled a National Road Safety Mission under which it would train 500,000 people in safe driving in 3 years at 61 Maruti Driving Schools and 4 Institutes of Driving Training and Research (IDTR) in Delhi, Dehradun and Vadodara.

Company History

In 1981, Maruti was launched. The company was started by the Government of India and was initially called Maruti Technical Services Private Limited. The first Managing Director of the company was Sanjay Gandhi, late-Indian Prime Minister Indira Gandhi’s son.

During the period of 1985 to 1996, a few other significant developments took place including Suzuki taking up 50% stake in Maruti, leading to a 50-50 joint venture between Maruti and the Government of India and over 60 per cent of its parts being produced in India leading to lower costs of production as the parts didn’t have to be imported from abroad. When asked why Suzuki was chosen as the partner of this established corporation, the chairman of Maruti, Mr. R. C Bhargava said that the company went to Japan and none of the companies out of Nissan, Mitsubishi and Daihatsu were ready to bring 40 per cent equity in India. Suzuki was the only company which agreed to bring 26 per cent equity in India and raise it to 40 per cent thereafter.

The first car that the company produced was a four-door Maruti 800 and the second car that the company produced was a Multi-Utility Vehicle called the Omni.

Between 1994 and 1996 Maruti released the Esteem, the Gypsy, the Omni, the Gypsy King, Zen and Esteem. It also opened a second plant in Manesar whose capacity at the time of opening was 2,00,000 units.

In 2000 Maruti launched a call center. This was the first time a car company had ever launched a call center in India. In this year, Maruti setup a website for its Wagon-R car, introduced a new model of the Zen, got the IRTE National Award for its safety initiative, traffic management and environment protection, launched the Baleno and the Wagon R with electric power steering, joined hands with Sumitomo for providing after-sales service and introduced the Suzuki Alto. The Gurgaon plant had stopped production due to a strike by the employees.

Maruti introduced its first CNG car in 2001. In the same year Maruti invested 550 crore rupees in manufacturing cars.

In 2002, Maruti launched Maruti Finance to offer financial services like extended warranty and finance for car insurance. It also hiked its car prices and launched the Versa. This was a good year for Maruti in exports as it produced 16,000 cars for an order to Europe.

In the next few years Maruti got into collaboration with various companies to launch car-selling schemes. They partnered with State Bank of India to launch a scheme where each branch of the bank would sell a Maruti car. The company also tied-up with Reliance Industries Limited for lease and fleet management. This was the same year Kumar Mangalam Birla joined Maruti as an independent director.

From 2005 - 2007 Maruti became the market leader of Indian cars and in 2006 unveiled the new Wagon-R in Punjab. In 2007, Maruti launched the SX4 sedan.

Company Milestones

1970: The Indian government launched a new car company called Maruti Technical Services Limited which created competition for the existing Ambassador Car Company.

1971: The government changed the name of the company to Maruti Limited. Indira Gandhi’s son, Sanjay Gandhi became the managing director of the company.

1977: The Company was liquidated as a result of corruption. There was a Maruti Scandal in 1978 where the court issued a notice to Maruti. Sanjay Gandhi passed away.

1981: The Company was re-established when the founders’ mother, Indira Gandhi took charge. The Company was now called Maruti Udyog Limited. After partnership with Japanese giant Suzuki Motor Corporation in a Joint Venture Agreement, the company was called Maruti Suzuki Company.

1983: Maruti produced its first car, the Maruti 800. It took the company thirteen months to produce this car. This changed the landscape of the Indian car market as Maruti 800 was the most cost-effective and fuel-efficient car in India.

1984: Maruti produced a large mini-van called the Omni that seated up to eight people. This was an addition to its existing offering of the Maruti 800.

Between 1985 and 1995: Maruti launched the Gypsy, the Maruti 1000, the Zen, the Esteem, and the Maruti On Road Service, a 24-hour service which gives customers 24-hour access to technicians and vans who are ready to help with any problem of the car round the clock. In 1987, the company made its first export sale, selling 500 cars to Hungary.

1996: This was a prominent year for Maruti as five new models of its cars were launched including the Gypsy (E), Omni (E), Gypsy King (E), the automatic Zen and the Esteem in a 1.3 litre engine. Gypsy has the engine from the Esteem. The engine had a horsepower of 65 bhp.

2000: Maruti launched India’s first call center and the Altrura, a luxury car. It also introduced the 16-Valve MPFI G13BB engine in the Gypsy and the power increased to 80 bhp.

2002: The WagonR Pride, Esteem (diesel version), Alto Spin LXi were introduced. Maruti Finance was started diversifying the company from its initial product offering of only cars to finance. Maruti also inaugurated a children’s park in Delhi as part of it’s Corporate Social Responsibility Initiative.

2003: Maruti launched the Grand Vitara.

2005: Maruti launched the Swift.

2006: Maruti had produced up to six million cars.

2007: Maruti launched the SX4, Swift Diesel and the company was renamed from Maruti Udyog Limited to Maruti Suzuki India Limited.

2008: Maruti launched the Swift DZire, the A-Star and inaugurated the K-series engine plant in Gurgaon.

2009: The Company shipped the first batch of A-Star cars from the Mundra port.

Vision & Values

Maruti is India’s leader in the automobile industry. It believes that the customer is king.

It is making sure that performance, after sales service and customer support are really good in India. Here are some key points from Maruti’s vision statement:

Modernization of the Indian Automobile Industry

Developing cars faster and selling them for less.

Production of fuel-efficient vehicles to conserve scarce resources.

Production of large number of motor vehicles which was necessary for economic growth.

Market Penetration, Market Development Similarly Product Development and Diversification.

Partner relationship management, Value chain, Value delivery network

Maruti has two values – capability and commitment. Maruti’s vision is to appear as a Learning Organization.

There are three processes that are critical to develop, reinforce and cascade a positive, transparent, supportive and high performing work culture, systems and practices across the company. The first process is the top level management’s ability to walk the talk –the manager’s ability to deliver on time and at high efficiency levels. The second is a rewards and recognition program that helps in assessment. Each member of the organization from the shop floor level to supervisors to the managers to the lower staff is recognized and rewarded for their efforts. These include monetary benefits and in-kind benefits. Employees are given the career development and career growth rewards. The third process is using communication techniques like the Newsletter and the Monthly magazine to highlight expectations and achievements of all the team members. This three-tiered approach of walking the talk, rewards and recognition and communication techniques is the three-pronged approach Maruti is taking to ensure that it’s visions and values are met with the topmost standards and that there is a high execution quotient in their work.

Maruti defines it’s vision statement on it’s website to include the following five areas: Customer Obsession: Making sure that the customer gets what he desires.

Fast, Flexible and First Mover: It produces and sells cars as a rapid pace.

Innovation and creativity: It introduces new technologies and new models at a rapid pace

Networking and Partnership: It believes in partnering with various companies from producing parts to hosting car shows.

Openness and Learning: People working in the company are given a chance to experiment and explore.

Management Team

Shinzo Nakanishi has been the Chief Executive Officer and Managing Director of Maruti Suzuki India Limited since 2007. He has created an Indian brand for cars for the middle-class. He joined Suzuki Motor Company, the parent company of Maruti Suzuki India Limited in 1971.

Prior to becoming Chief Executive Officer of Maruti Suzuki India Limited, he served as the Chairman of Maruti Suzuki India Limited from 2002 to 2007.He currently is also the Senior Managing Executive Officer and Executive General Manager of Global Marketing at Suzuki Motor Company.

Maruti Suzuki appointed Ajay Seth as the Chief Financial Officer. Prior to becoming the Chief Financial Officer, Mr. Seth served as the Vice President of Finance for Maruti Suzuki India Limited.

S. Ravi Aiyar is the Company Secretary and Chief Legal Officer of Maruti Suzuki India Ltd. Since 2004, Mr. Aiyar worked as the Company Secretary and Chief Legal Officer of Maruti and has been Director of Maruti Insurance Brokers Limited.

Prior to joining Maruti, Mr. R.C. Bhargava worked at Bharat Heavy Electricals Limited. In 1981 he joined Maruti as the Marketing Director and in 1985 he was appointed as the Chief Executive Officer of Maruti. In 1990, he was named the Chairman and Managing Director and even when Maruti went into a 50-50 joint venture with Suzuki he remained at the Chief Executive Officer until 1997.

Before becoming a board member of Maruti Suzuki India Limited, Mr. Shinzo Nakanishi was the Managing Director and CEO of Maruti in 2007, the Senior Managing Executive Officer and Executive General Manager of Maruti in 2004 and the Managing Director and Executive General Manager of Suzuki in 2003. He also worked as the Director of Suzuki in 1999 and in different positions of Maruti in 1971-1998.

Mr. Tsuneo Ohashi was the Director and Managing Executive Officer of Maruti in 2008, the Joint Managing Director in 2006 and worked at various levels of Suzuki from 1974-2005.

Lastly, Mr. Amal Ganguly was the Chairman and Senior Partner of Price Waterhouse Coopers from 1996 – 2003, the Partner of PWC from 1969-1996 and the Senior Manager of PWC from 1962-1969.

Manufacturing Facilities

In August 1986, Maruti produced 1,00,000 cars. By 1993, the company produced 1, 96,820 cars, mostly Maruti 800s. Cumulative production reached 1 million in 1994, 2 million in October 1997, approximately 4 million in 2003, 4.7 million in 2004, 5 million in 2005 and 6 million cars by 2006.

Maruti Suzuki had surpassed its Japanese parent, Suzuki Motor Corporation in overall production during 2009, when Maruti Suzuki rolled out 9,66,399 units in 2009, while its parent Suzuki Motor Corporation produced only 9,08,302 units.

Maruti’s two production plants in India are at Manesar and at Gurgaon. In 2009, Maruti expanded its capital expenditure in the Manesar plant on the lines of 2,000 crore. The company launched a three-lakh unit line in Manesar to increase production capacity by about 1.3 million units. The Manesar plant is responsible for the production of the Swift, Swift DZire, A-star and SX4. The remaining Maruti cars are manufactured in Maruti Suzuki's Gurgaon Plant.

During 2010, Maruti sold 8, 36,893 units in the domestic market, and 1, 30,688 units in exports. Maruti has a growing production of cars in the domestic market to meet the growing demand of consumers in India. The Alto and Wagon-R brought in maximum revenue to the domestic market with Alto selling 2.4 lakh units and WagonR selling 1.4 lakh units of cars.

Today, Maruti sells more in the domestic market of India than in the export market.

Technology

Maruti Suzuki uses an innovative Compressed Natural Gas technology – the Intelligent Gas Port Injection (iGPI) on five of its models – the SX4, Eeco, WagonR, Estilo and Alto. The iGPI technology delivers more power and runs like a petrol-filled engine while achieving fuel-efficiency. The iGPI technology uses injectors for each cylinder and a particular amount of CNG is injection in the engine through gas ports. The Engine Control Unit controls the amount of CNG needed for each ride.

Two components used by Maruti in cars such as the Maruti Omni to help increase fuel economy are the crankshaft sensor and knock sensor. They control the ignition timing and fuel injection. The crank shaft is a part of the car’s engine that translates its linear motion into rotation. The sensor is part of the internal combustion engine which monitors the position and rotational speed of the crankshaft. The knock sensor is a part that’s linked to the car’s engine-when the car’s engine is not working it knocks on it and usually you hear the knocking sound. The knock sensor will send a signal to the Powercontrol Car Module (PCM).

The Maruti Swift has a Direct Diesel Injection System engine. This engine has efficient combustion, higher torque and cleaner emissions. It is an extremely light engine and has a 75 bhp, 190 Nm of torque capacity. It has a five-step multi-injection technology that makes the car run more smoothly than other cars. It also has a Double Over Head Camshaft that gives the engine a quick run. It also has a Chain Drive Timing System. This engine is way better than the Maruti 800 engine which has a Single Over Head Camshaft and only two valves per cylinder while the Swift has sixteen-valve cylinder.

The Maruti Suzuki SX4 has a Variable Valve Timing engine.

According to the company, they will use K-Series engines in all car models. India’s largest car manufacturer Maruti Suzuki decided to implement the K-series petrol engine in all the models for at least five years according to a company report. The K-Series engine is a straight four cylinder engine that comes in Single Overhead Camshaft and Double Overhead Camshaft variants. This engine will be made in the Maruti Manesar plant in Haryana for the A-Star car which is produced in India and sold in Europe. The K-Series engine is Euro 4 and Euro 5 compliant and is the most advanced of engines. The engine has a CO2 emission of 109 gm/km and plans to reduce it further. The engine is extremely fuel efficient.

Awards & Recognition

As one of the top Indian brands of cars, Maruti Suzuki has won many national and international awards since it began production.

Some of the major accomplishments of Maruti are listed below:

Maruti Suzuki Alto received the TNS Voice of Customer Award in 2008. TNS Global is a market research firm. In the same year Maruti received the CNBC-Autocar India Award in the category Best Value for Money Car for the SX4. It also received the CNBC-Autocar India Best Mid Size Car Award and the CNBC-Autocar India Car of the Viewers’ Choice Award for the SX4. Maruti Suzuki India Limited received The Car Manufacturer of the Year Award in 2008.

In 2010, Maruti won the CNBC-TV18 Overdrive Manufacturer of the Year Award and the Autocar Manufacturer of the Year Award.

Alto’s “Boondon Mein” campaign won the Silver medal of the prestigious “Effie Award” in 2006 and 2007.

Alto won the “Car of the Year” and “Most Exciting New Car of the Year” by India’s automobile magazine in 2000.

Some of the international awards that Maruti has won include the following:

Japan – It won the Car of the Year award by the Automotive Researchers' & Journalists' Conference, the 2005-2006 Car of the Year, the Goof Design Award by Japan Industrial Design Promotion Organization and the 2005-2006 Carview of the Year Award.

Iceland & Ireland – Maruti Suzuki won the Car of the Year 2006 given out by the BIBD Association of Automotive Journalists, the Samperit Irish Car of the Year 2006 given out by the Irish Motoring Writer’s Association.

New Zealand and Australia – Maruti won the Fairfax AMI Small Car of the Year Award by Autocar, the National Business Review Small Car of the Year Award by The National Business Review and the 2005 Carsguide Car of the Year.

Malaysia – Maruti Swift was the winner in the NST Mastercard Car of the Year 2005 “Small Car” category.

China – Maruti Swift won the 2005 CTV COTY “Economical Car” by CCTV.

International Operations

Maruti Suzuki is a global company with over 8,500 employees engaged in sales, customer service, manufacturing, and distribution in many countries across the world. It is partly owned by the government of India and partly owned by the Japanese company, Suzuki Motor Corporation. Suzuki Motor Corporation, the parent company owns 54% of Maruti’s shares.

Maruti’s cars are of European style but custom-made to cater to the local markets. Maruti Suzuki has launched the Grand Vitara, SX4 and the Swift as part of the worldwide strategy. Maruti Suzuki not only provides hatchbacks, mid and small level cars but also luxury cars. Maruti Suzuki has also launched another concept car called Kizashi which was showcased in the Frankfurt Motor Show and is now available in India.

The Grand Vitara, which is an SUV and Kizashi, which is a sports sedan are imported from Japan as completely built units(CBU).

Maruti Suzuki is sold in China by Jiangnan Auto. The company has launched the car at Rs. 1.24 lakhs. Four companies that produced the Maruti 800 in China are: Chang’an Auto, Jiang Nan, Xi’an Tai and Sichuan Auto

Maruti Suzuki also has office in Japan. Indian engineers sometimes travel to Japan to work on Maruti cars and Japanese engineers sometimes travel to India to provide their expertise for Maruti Suzuki.

Exports

Maruti Suzuki exports entry-level models across the globe to over 100 countries and the focus has been on identifying new markets. The company exports to the United Kingdom, Italy, Hungary, Netherlands, Germany, Latin America, Africa, Philippines and Indonesia. Along with these countries, Maruti also sells its cars to Algeria, Chile, Sri Lanka and Nepal.

The company exported 38,000 passenger cars in 2006-2007, around 6.4 per cent of its total sales. The car that contributes most to Maruti’s export income is the A-Star model.

In 2007, Maruti got an export order of 11,000 units of the Zen Estilo to Indonesia and 1,500 units of the Maruti Alto to the Philippines, become the initial car manufacturer to export to South East Asia.

Maruti crossed the cumulative half-a-million export mark in February 2008, becoming the first Indian car company to export half-a-million units.

Maruti has tied up with the Mundra post for development of port facilities for export shipments through Pune Car Carriers. Maruti started exporting cars from this post in January 2009.

Moving to international markets, Maruti has large export volumes to Latin America and the lesser-developed region of Africa. Maruti’s exports have increased by 60% over the years at these two locations.

In 2008, in a joint venture between Maruti Suzuki, Mundra Port and the Special Economic Zone, the company exported 1,00,000 units of the A-Star from the Mundra Port.

Even though the company exports to all five continents, Europe makes up 56 per cent of Maruti’s cumulative exports as of February 2011, making it the single largest source of export income for the company. The sales figures for the continent of Europe as of February 2011, by country are given below:

Future Plans

On May 11, 2011, Maruti announced its plans to design new car models at its Rohtak Plant in India. The new car models will be crafted for the next four years for the Indian and International Market.

Maruti is experimenting with new car models in an effort to stay ahead of its competition and will be responsible for 25 per cent of Suzuki, its parent company’s, revenues. In the financial year 2010-2011 Maruti Suzuki reported a net sales figure of 37,522 crore rupees.

Maruti will invest in a new plant in Gujarat which will produce 6 million units a year which is being done in an effort to make the company the leader in the car market. The company is having a look at different plants as shown by the Government of India.

In another effort, Maruti will introduce four new cars in the Indian market: The mass-market hatchback, a utility vehicle, a new and improved Swift, and a unique SX4.

The company plans to release the design of the YE3, the hatchback by June-July 2011 while the car will actually be shown in the Auto Expo 2012. The company plans to design the YE3 without any involvement of Suzuki which is a major feat since most of its cars have been designed in collaboration with Suzuki in the past. The YE3 will be a four-door, four seat hatchback and will be available in a 600-800cc engine and a five speed manual transmission.

The company also plans to launch the Maruti R3 under a different name. The Maruti R3 is a Multi-Utility Vehicle that will come in a Rs. 7 lakhs – Rs. 9 lakhs ex-showroom price and is a six-seater compact van strapped with three rows of seats and rear-hinged rear doors. The car will come in both 1.2 litre K-Series engines and a 1.6 litre Variable Valve Timing engine, each of which have been present in the popular models of Swift and SX4. The R3 will compare to an Innova. The company plans to sell it in emerging markets. It will be showcased in the Auto Expo 2012. The company plans to get a diesel engine for the car from Volkswagen.

The third new model of Maruti, the new Swift will be launched by July 2011 will a 1.3 litre multi-jet diesel engine and a 1.2 litre K-Series engine. The new Swift fall in the Rs. 3.5 - 5.5 lakhs bracket depending on the model and approximately 17,000 units will be produced each year.

Along with coming up with new cars and new plants, Maruti is also expanding its transportation capacity. The company has forged partnerships for this with the Adani group to set up a mega car terminal at the Mundra port.

Our endeavor is to provide car buying consumers in India a one stop shop where they can do all their research about the latest cars in India. The Auto industry has been booming in recent times and we have moved to selling almost 2 million cars a year. The used car industry has been growing at an even faster pace.